Variable Supplement

So what is the VSF?????

SOME HISTORY AND FACTS ABOUT THE VARIABLE SUPPLEMENT FUND (VSF) ​(From LBA)

For some time now the Bloomberg Administration, through the media (especially the New York Post), has been orchestrating a one-sided and often misinformed crusade against the Uniformed Unions’ pension, health and variable supplement settlements. These settlements were achieved through honest, open and fair bargaining with the City and their representatives with respective Union Officers. It seems, as of late, that the City has decided to no longer hold up their end of the bargains, nor to deal with the Unions in an open and transparent manner.

On Wednesday, January 19th, 2011, Mayor Bloomberg gave his State of the City Address at the St. George Theater in Staten Island. Here is part of the mayor’s speech as it applies to Pension Reform:

“We can also save another $200 million every year by eliminating, for future uniformed retirees, what is effectively a $12,000 annual bonus, paid on top of full pension benefits every year around the holidays. City taxpayers just cannot be expected to give substantial holiday bonuses when so many of them are out of work or having their own wages frozen or cut.”

This “annual bonus” the Mayor is referring to is the Variable Supplement Fund (VSF) which was initially created at the City’s urging. The original deal came about at the City’s urging because the administration under then Mayor John Lindsay wanted to be able to invest money from the Police and Fire Pension Funds in the stock market and needed the approval of the Unions. The Unions wanted an improvement in the formula used to calculate what percentage of salary would determine pension allowances for their members.

The matter went before an arbitrator and during the discussions the Chief City Actuary proposed as an alternative that the VSF be created, with funding only to be provided in years when the performance of stock investments topped that of the City’s bond holdings by a specified percentage. The unions decided this was acceptable and the arbitrator incorporated it in his award. The funds were created by a state law passed in 1970, that made them retroactive to October 1, 1968. The profits from the Fund were good enough to provide “skims” into the VSF for the first two years of the fund’s existence and an initial benefit of $40 per month for “service” retirees (those who receive Disability Pensions are ineligible for the VSF, even if they worked the 20 years mandated to qualify for a full regular pension), and 11 year dry spell followed.

The lack of growth in the funds brought some restlessness within the police and fire ranks, which intensified when at one point fire officers were unable to receive benefits because there wasn’t enough money in their union’s funds in the early 1980s. Then a five year stretch of robust stock market performance swelled the VSF coffers, producing a climate in which both sides were looking to make a change. By the time the

Patrolman’s Benevolent Association was negotiating for a contract that would take effect retroactive to July 1, 1987, the VSF payouts had risen to $150 a month, but retirees and some active members were convinced that much more could be paid. The City and union trustees who oversaw the police and fire VSF funds were constrained by the recommendations of the City Actuary, who had to be certain that the funds would not have their reserves exhausted if the stock market suddenly tanked.

While this was frustrating to VSF recipients, Mayor Ed Koch found it exasperating that when the skims came, the retirees did well but the City could not take advantage of the boom times to pullout excess funds to improve City services. Mayor Koch instructed his chief negotiator to seek a deal with the PBA that would pave the way for the City to have pre-determined costs in return for set payments, limiting what it would have to share during bull markets.

A reminder of the way the market could turn came with the October 1987 crash, and probably helped convince the PBA that there was something to be said for a defined benefit payment even if it potentially surrendered a bigger share if the boom times on Wall Street returned. The PBA reached an agreement in May 1988 under which the City gained control of the PBA fund by agreeing to raise the annual benefit from $1,800 to $2,500, with $500 increases in each year to follow until a peak was reached of $12,000 in 2007. The Chief Negotiator for the city said, “we were both willing to trade uncertainty for certainty.”

The Chief Negotiator for the City, Bob Linn, predicted at the time that the City would realize its greatest savings from the trade-in over the long haul, and a decade later that prediction seemed to have been borne out with a vengeance. During the second term of Mayor Giuliani, it was estimated that the city’s share of the pension fund’s profits during the stock market boom of the late 1990s was $4 billion greater than it would have been had the unions refused to make the conversion to a defined-benefit payment. The Deputy Budget Director for the City also had the foresight to get a key component put into the VSF legislation that maximized city profits during the boom: a “sluice gate” provision under which it was only required to skim off profits from stock investments if the fund’s liabilities exceed their assets at the time.

Then the market cooled off at the beginning of this decade, and reached what Mr. Bloomberg had described as meltdown status since 2008. No longer does it seem that the unions got taken and the City made out like bandits, and the swing of the pendulum has served as a reminder that union leaders’ decision to “trade uncertainty for certainty” was a pretty good one.

Mayor Bloomberg decided to retain some other information from the media and fail to mention it at his State of the City Address. This had to do with the Deferred Retirement Option Plan legislation which was ushered through the Legislature at Mayor Bloomberg’s request, in 2002. In other words, someone who would have been eligible to collect the Banked VSF in December 2002, when it was $9,500, but continued working until December 2008 would have accumulated $76,500 in their VSF “DROP” account. (The above is a detailed summary of an article “Christmas Bonuses’ And Other Wicked Fables” which appeared in the Chief-Leader Newspaper, written by Richard Steier, published on March 20, 2009)

It is our position that the VSF was acquired through open and honest labor negotiations between the City and the Unions. Again, the VSF was created at the City’s behest so that they could benefit economically from the Unions’ fiscal prudence. The LBA intends to protect and maintain the VSF and to sustain all other benefits that were attained through open and honest arbitration with the City. We would expect and appreciate the same courtesy from the City to bargain in an atmosphere of objective fairness and transparency.

Variable Supplement Fund (VSF) “DROP” In addition to the pension VSF payment, there will now be an active VSF payment for members who qualify. This is VSF money that a member would have gotten if he or she had retired after twenty years of allowable police service. Active members will have the VSF banked for them with a 20th anniversary date of January 1, 2002 or after. This money will be sent out December 15 if you retire prior to November 1 of the same year. Ifa member retires in the month of November, their check will be mailed December 31. In those cases when a retiree retires in the month of December he/she will receive their VSF in December of the following year.

Senate Bill S4096 2017-2018

Legislative Session Relates to extending the benefits of the variable supplements fund to all New York city police officers, firefighters, housing police, transit police, correction officers and registered domestic partners

S T A T E O F N E W Y O R K ________________________________________________________________________ 4096 2017-2018 Regular Sessions I N S E N A T E February 3, 2017 ___________ Introduced by Sen. SANDERS -- read twice and ordered printed, and when printed to be committed to the Committee on Cities AN ACT to amend the administrative code of the city of New York, in relation to extending the benefits of the variable supplements fund to all New York city police officers, firefighters, housing police, tran- sit police, correction officers and registered domestic partners

THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS:1 Section 1. Section 13-271 of the administrative code of the city of 2 New York is amended by adding a new subdivision g to read as follows:3 G. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE PROVISIONS OF THIS 4 SUBCHAPTER SHALL APPLY TO ALL POLICE OFFICERS WHO, PRIOR TO THE EFFEC- 5 TIVE DATE OF THIS SUBDIVISION, WERE INELIGIBLE FOR THE BENEFITS SET 6 FORTH IN THIS SUBCHAPTER, INCLUDING ALL DISABLED NEW YORK CITY POLICE 7 OFFICERS, LINE OF DUTY WIDOWS AND WIDOWERS, REGISTERED DOMESTIC PARTNERS 8 AND ALL OTHER NEW YORK CITY POLICE OFFICERS WHO RECEIVE BENEFITS FROM 9 THE NEW YORK CITY POLICE PENSION FUND. ALL SUCH POLICE OFFICER RETI- 10 REES, WIDOWS AND WIDOWERS AND REGISTERED DOMESTIC PARTNERS SHALL BE 11 ELIGIBLE AND ARE HEREBY GRANTED ALL RIGHTS AND BENEFITS SET FORTH IN 12 THIS SUBCHAPTER PURSUANT TO THE SCHEDULE SET FORTH IN SUBPARAGRAPH (I) 13 OF PARAGRAPH SEVEN OF SUBDIVISION A OF THIS SECTION FROM THE EFFECTIVE 14 DATE OF THIS SUBDIVISION. HOWEVER, NOTHING IN THIS SUBDIVISION SHALL 15 SERVE TO CAUSE A REDUCTION IN THE VARIABLE SUPPLEMENT PAYMENT TO ANY 16 POLICE OFFICER OR THEIR BENEFICIARY WHO WAS ELIGIBLE FOR THE BENEFIT 17 PRIOR TO THE EFFECTIVE DATE OF THIS SUBDIVISION.

18 S 2. Section 13-281 of the administrative code of the city of New York 19 is amended by adding a new subdivision g to read as follows:20 G. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE PROVISIONS OF THIS 21 SUBCHAPTER SHALL APPLY TO ALL POLICE OFFICERS WHO, PRIOR TO THE EFFEC- 22 TIVE DATE OF THIS SUBDIVISION, WERE INELIGIBLE FOR THE BENEFITS SET 23 FORTH IN THIS SUBCHAPTER, INCLUDING ALL DISABLED NEW YORK CITY POLICE EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD02205-01-7 S. 4096 2 1 OFFICERS, LINE OF DUTY WIDOWS AND WIDOWERS, REGISTERED DOMESTIC PARTNERS 2 AND ALL OTHER RETIRED NEW YORK CITY POLICE OFFICERS WHO RECEIVE BENEFITS 3 FROM THE NEW YORK CITY POLICE PENSION FUND. ALL SUCH RETIRED POLICE 4 OFFICERS, WIDOWS AND WIDOWERS AND REGISTERED DOMESTIC PARTNERS SHALL BE 5 ELIGIBLE AND ARE HEREBY GRANTED ALL RIGHTS AND BENEFITS SET FORTH IN 6 THIS SUBCHAPTER PURSUANT TO THE SCHEDULE SET FORTH IN SUBPARAGRAPH (I) 7 OF PARAGRAPH TWO OF SUBDIVISION A OF THIS SECTION FROM THE EFFECTIVE 8 DATE OF THIS SUBDIVISION. HOWEVER, NOTHING IN THIS SUBDIVISION SHALL 9 SERVE TO CAUSE A REDUCTION IN THE VARIABLE SUPPLEMENT PAYMENT TO ANY 10 POLICE OFFICER OR THEIR BENEFICIARY WHO WAS ELIGIBLE FOR THE BENEFIT 11 PRIOR TO THE EFFECTIVE DATE OF THIS SUBDIVISION.

12 S 3. Section 13-385 of the administrative code of the city of New York 13 is amended by adding a new subdivision i to read as follows:14 I. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE PROVISIONS OF THIS 15 SUBCHAPTER SHALL APPLY TO ALL FIREFIGHTERS WHO, PRIOR TO THE EFFECTIVE 16 DATE OF THIS SUBDIVISION, WERE INELIGIBLE FOR THE BENEFITS SET FORTH IN 17 THIS SUBCHAPTER, INCLUDING ALL DISABLED NEW YORK CITY FIREFIGHTERS, LINE 18 OF DUTY WIDOWS AND WIDOWERS, REGISTERED DOMESTIC PARTNERS AND ALL OTHER 19 RETIRED FIREFIGHTERS WHO RECEIVE BENEFITS FROM THE NEW YORK FIRE DEPART- 20 MENT PENSION FUND. ALL SUCH FIREFIGHTERS, WIDOWS AND WIDOWERS, REGIS- 21 TERED DOMESTIC PARTNERS AND RETIREES SHALL BE ELIGIBLE AND ARE HEREBY 22 GRANTED ALL RIGHTS AND BENEFITS SET FORTH IN THIS SUBCHAPTER PURSUANT TO 23 THE SCHEDULE SET FORTH IN SUBPARAGRAPH (I) OF PARAGRAPH TEN OF SUBDIVI- 24 SION A OF THIS SECTION FROM THE EFFECTIVE DATE OF THIS SUBDIVISION. 25 HOWEVER, NOTHING IN THIS SUBDIVISION SHALL SERVE TO CAUSE A REDUCTION IN 26 THE VARIABLE SUPPLEMENT PAYMENT TO ANY FIREFIGHTER OR THEIR BENEFICIARY 27 WHO WAS ELIGIBLE FOR THE BENEFIT PRIOR TO THE EFFECTIVE DATE OF THIS 28 SUBDIVISION.

29 S 4. Section 13-395 of the administrative code of the city of New York 30 is amended by adding a new subdivision f to read as follows:31 F. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE PROVISIONS OF THIS 32 SUBCHAPTER SHALL APPLY TO ALL FIREFIGHTERS WHO, PRIOR TO THE EFFECTIVE 33 DATE OF THIS SUBDIVISION, WERE INELIGIBLE FOR THE BENEFITS SET FORTH IN 34 THIS SUBCHAPTER, INCLUDING ALL DISABLED NEW YORK CITY FIREFIGHTERS, LINE 35 OF DUTY WIDOWS AND WIDOWERS, REGISTERED DOMESTIC PARTNERS AND ALL OTHER 36 FIREFIGHTERS WHO RECEIVE A BENEFIT FROM THE NEW YORK FIRE DEPARTMENT 37 PENSION FUND. ALL SUCH FIREFIGHTERS, WIDOWS AND WIDOWERS, REGISTERED 38 DOMESTIC PARTNERS AND RETIREES SHALL BE ELIGIBLE AND ARE HEREBY GRANTED 39 ALL RIGHTS AND BENEFITS SET FORTH IN THIS SUBCHAPTER PURSUANT TO THE 40 SCHEDULE SET FORTH IN SUBPARAGRAPH (I) OF PARAGRAPH TWO OF SUBDIVISION A 41 OF THIS SECTION FROM THE EFFECTIVE DATE OF THIS SUBDIVISION. HOWEVER, 42 NOTHING IN THIS SUBDIVISION SHALL SERVE TO CAUSE A REDUCTION IN THE 43 VARIABLE SUPPLEMENT PAYMENT TO ANY FIREFIGHTER OR THEIR BENEFICIARY WHO 44 WAS ELIGIBLE FOR THE BENEFIT PRIOR TO THE EFFECTIVE DATE OF THIS SUBDI- 45 VISION.

46 S 5. Subdivision 4 of section 13-191 of the administrative code of the 47 city of New York, as added by chapter 844 of the laws of 1987, is 48 amended by adding a new paragraph (i) to read as follows:49 (I) NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE PROVISIONS OF THIS 50 SECTION SHALL APPLY TO ALL TRANSIT POLICE MEMBERS WHO RETIRED AS TRANSIT 51 POLICE OFFICERS, WHO, PRIOR TO THE EFFECTIVE DATE OF THIS PARAGRAPH, 52 WERE INELIGIBLE FOR THE BENEFITS SET FORTH IN THIS SECTION, INCLUDING 53 ALL DISABLED TRANSIT POLICE MEMBERS, LINE OF DUTY WIDOWS AND WIDOWERS, 54 REGISTERED DOMESTIC PARTNERS AND ALL OTHER TRANSIT POLICE MEMBERS WHO 55 RETIRED AS TRANSIT POLICE OFFICERS AND WHO RECEIVE BENEFITS FROM THE NEW 56 YORK CITY EMPLOYEES' RETIREMENT SYSTEM. ALL SUCH TRANSIT POLICE OFFICER S. 4096 3 1 RETIREES, WIDOWS AND WIDOWERS AND REGISTERED DOMESTIC PARTNERS SHALL BE 2 ELIGIBLE AND ARE HEREBY GRANTED ALL RIGHTS AND BENEFITS SET FORTH IN 3 THIS SECTION PURSUANT TO THE SCHEDULE SET FORTH IN SUBPARAGRAPH ONE OF 4 PARAGRAPH (C) OF THIS SUBDIVISION, FROM THE EFFECTIVE DATE OF THIS PARA- 5 GRAPH. HOWEVER, NOTHING IN THIS PARAGRAPH SHALL SERVE TO CAUSE A 6 REDUCTION IN THE VARIABLE SUPPLEMENT PAYMENT TO ANY TRANSIT POLICE OFFI- 7 CER OR THEIR BENEFICIARY WHO WAS ELIGIBLE FOR THE BENEFIT PRIOR TO THE 8 EFFECTIVE DATE OF THIS PARAGRAPH.

9 S 6. Subdivision 4 of section 13-191 of the administrative code of the 10 city of New York, as added by chapter 846 of the laws of 1987, is 11 amended by adding a new paragraph (i) to read as follows:12 (I) NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE PROVISIONS OF THIS 13 SECTION SHALL APPLY TO ALL HOUSING POLICE MEMBERS WHO RETIRED AS HOUSING 14 POLICE OFFICERS, WHO, PRIOR TO THE EFFECTIVE DATE OF THIS PARAGRAPH, 15 WERE INELIGIBLE FOR THE BENEFITS SET FORTH IN THIS SECTION, INCLUDING 16 ALL DISABLED HOUSING POLICE MEMBERS, LINE OF DUTY WIDOWS AND WIDOWERS, 17 REGISTERED DOMESTIC PARTNERS AND ALL OTHER HOUSING POLICE MEMBERS WHO 18 RETIRED AS HOUSING POLICE OFFICERS AND WHO RECEIVE BENEFITS FROM THE NEW 19 YORK CITY EMPLOYEES' RETIREMENT SYSTEM. ALL SUCH HOUSING POLICE OFFICER 20 RETIREES, WIDOWS AND WIDOWERS AND REGISTERED DOMESTIC PARTNERS SHALL BE 21 ELIGIBLE AND ARE HEREBY GRANTED ALL RIGHTS AND BENEFITS SET FORTH IN 22 THIS SECTION PURSUANT TO THE SCHEDULE SET FORTH IN SUBPARAGRAPH ONE OF 23 PARAGRAPH (C) OF THIS SUBDIVISION, FROM THE EFFECTIVE DATE OF THIS PARA- 24 GRAPH. HOWEVER, NOTHING IN THIS PARAGRAPH SHALL SERVE TO CAUSE A 25 REDUCTION IN THE VARIABLE SUPPLEMENT PAYMENT TO ANY HOUSING POLICE OFFI- 26 CER OR THEIR BENEFICIARY WHO WAS ELIGIBLE FOR THE BENEFIT PRIOR TO THE 27 EFFECTIVE DATE OF THIS PARAGRAPH.

28 S 7. Subdivision 4 of section 13-192 of the administrative code of the 29 city of New York, as added by chapter 844 of the laws of 1987, is 30 amended by adding a new paragraph (h) to read as follows:

31 (H) NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE PROVISIONS OF THIS 32 SECTION SHALL APPLY TO ALL TRANSIT POLICE MEMBERS WHO RETIRED AS TRANSIT 33 POLICE SUPERIOR OFFICERS, WHO, PRIOR TO THE EFFECTIVE DATE OF THIS PARA- 34 GRAPH, WERE INELIGIBLE FOR THE BENEFITS SET FORTH IN THIS SECTION, 35 INCLUDING ALL DISABLED TRANSIT POLICE MEMBERS, LINE OF DUTY WIDOWS AND 36 WIDOWERS, REGISTERED DOMESTIC PARTNERS AND ALL OTHER TRANSIT POLICE 37 MEMBERS WHO RETIRED AS TRANSIT POLICE SUPERIOR OFFICERS AND WHO RECEIVE 38 BENEFITS FROM THE NEW YORK CITY EMPLOYEES' RETIREMENT SYSTEM. ALL SUCH 39 TRANSIT POLICE SUPERIOR OFFICER RETIREES, WIDOWS AND WIDOWERS AND REGIS- 40 TERED DOMESTIC PARTNERS SHALL BE ELIGIBLE AND ARE HEREBY GRANTED ALL 41 RIGHTS AND BENEFITS SET FORTH IN THIS SECTION PURSUANT TO THE SCHEDULE 42 SET FORTH IN SUBPARAGRAPH ONE OF PARAGRAPH (C) OF THIS SUBDIVISION, FROM 43 THE EFFECTIVE DATE OF THIS PARAGRAPH. HOWEVER, NOTHING IN THIS PARAGRAPH 44 SHALL SERVE TO CAUSE A REDUCTION IN THE VARIABLE SUPPLEMENT PAYMENT TO 45 ANY TRANSIT SUPERIOR POLICE OFFICER OR THEIR BENEFICIARY WHO WAS ELIGI- 46 BLE FOR THE BENEFIT PRIOR TO THE EFFECTIVE DATE OF THIS PARAGRAPH.47 S 8. Subdivision 4 of section 13-192 of the administrative code of the 48 city of New York, as added by chapter 846 of the laws of 1987, is 49 amended by adding a new paragraph (h) to read as follows:50 (H) NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE PROVISIONS OF THIS 51 SECTION SHALL APPLY TO ALL HOUSING POLICE MEMBERS WHO RETIRED AS HOUSING 52 POLICE SUPERIOR OFFICERS, WHO, PRIOR TO THE EFFECTIVE DATE OF THIS PARA- 53 GRAPH, WERE INELIGIBLE FOR THE BENEFITS SET FORTH IN THIS SECTION, 54 INCLUDING ALL DISABLED HOUSING POLICE MEMBERS, LINE OF DUTY WIDOWS AND 55 WIDOWERS, REGISTERED DOMESTIC PARTNERS AND ALL OTHER HOUSING POLICE 56 MEMBERS WHO RETIRED AS HOUSING POLICE SUPERIOR OFFICERS AND WHO RECEIVE S. 4096 4 1 BENEFITS FROM THE NEW YORK CITY EMPLOYEES' RETIREMENT SYSTEM. ALL SUCH 2 HOUSING POLICE SUPERIOR OFFICER RETIREES, WIDOWS AND WIDOWERS AND REGIS- 3 TERED DOMESTIC PARTNERS SHALL BE ELIGIBLE AND ARE HEREBY GRANTED ALL 4 RIGHTS AND BENEFITS SET FORTH IN THIS SECTION PURSUANT TO THE SCHEDULE 5 SET FORTH IN SUBPARAGRAPH ONE OF PARAGRAPH (C) OF THIS SUBDIVISION, FROM 6 THE EFFECTIVE DATE OF THIS PARAGRAPH. HOWEVER, NOTHING IN THIS PARAGRAPH 7 SHALL SERVE TO CAUSE A REDUCTION IN THE VARIABLE SUPPLEMENT PAYMENT TO 8 ANY HOUSING POLICE SUPERIOR OFFICER OR THEIR BENEFICIARY WHO WAS ELIGI- 9 BLE FOR THE BENEFIT PRIOR TO THE EFFECTIVE DATE OF THIS PARAGRAPH.

10 S 9. Subdivision 4 of section 13-194 of the administrative code of the 11 city of New York is amended by adding a new paragraph (h) to read as 12 follows:​ 13 (H) NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE PROVISIONS OF THIS 14 SECTION SHALL APPLY TO ALL CORRECTION OFFICER MEMBERS WHO RETIRED AS 15 CORRECTION OFFICERS, WHO, PRIOR TO THE EFFECTIVE DATE OF THIS PARAGRAPH, 16 WERE INELIGIBLE FOR THE BENEFITS SET FORTH IN THIS SECTION, INCLUDING 17 ALL DISABLED CORRECTION OFFICER MEMBERS, LINE OF DUTY WIDOWS AND WIDOW- 18 ERS, REGISTERED DOMESTIC PARTNERS AND ALL OTHER CORRECTION OFFICER 19 MEMBERS WHO RETIRED AS CORRECTION OFFICERS AND WHO RECEIVE BENEFITS FROM 20 THE NEW YORK CITY EMPLOYEES' RETIREMENT SYSTEM. ALL SUCH CORRECTION 21 OFFICER RETIREES, WIDOWS AND WIDOWERS AND REGISTERED DOMESTIC PARTNERS 22 SHALL BE ELIGIBLE AND ARE HEREBY GRANTED ALL RIGHTS AND BENEFITS SET 23 FORTH IN THIS SECTION PURSUANT TO THE SCHEDULE SET FORTH IN SUBPARAGRAPH 24 ONE OF PARAGRAPH (C) OF THIS SUBDIVISION, FROM THE EFFECTIVE DATE OF 25 THIS PARAGRAPH. HOWEVER, NOTHING IN THIS PARAGRAPH SHALL SERVE TO CAUSE 26 A REDUCTION IN THE VARIABLE SUPPLEMENT PAYMENT TO ANY CORRECTION OFFICER 27 OR THEIR BENEFICIARY WHO WAS ELIGIBLE FOR THE BENEFIT PRIOR TO THE 28 EFFECTIVE DATE OF THIS PARAGRAPH.

/by Peter Thomann, EA, CFP®​As some are aware, VSF DROP money for NYPD Detectives, Sergeants, Lieutenants, and Captains/above who retired in 2012 has been delayed. Why did this happen? The Police Superior Officers’ Variable Supplements Fund (PSOVSF) ran out of money. It has been reported that as of December 15th, 2012 the PSOVSF had assets of $213 million and liabilities of $220 million. Legislation has been sent to Albany to get NYC to fund the VSF DROP money owed to retirees. This may be an unexpected tax headache for some 2012 retirees who were due VSF DROP money and did some tax planning. *Update: This issue has been corrected and 2012 retirees have received their VSF DROP money.

The misinformed Media and some politicians with ill-will towards the uniformed service have been attacking it for years, and lying about it

Mar 9, 2009 - So-called “Christmas bonuses” given to NYPD and FDNY retirees as pension “sweeteners” topped $450 million last year and are poised to be an extra-sour burden on recession-shocked city coffers. Deft bargaining by union officials 40 years ago won their retirees a share of the returns of their pension ...

Bashing from 2014Today, about 41,000 retired city police, fire and correction officers will receive $12,000 checks. These annual payments date to 1968, when the Lindsay administration invested some pension funds in the stock market and agreed to augment pensioners’ checks if returns were high enough. In the 1980s, the city guaranteed the lump-sum payments on the condition that any excess returns remained in the pension funds. The Dec. 15 checks will total about $500 million as taxpayers plow $8.6 billion—11% of the city budget—into the pension funds.